Election 2022: Labor to spend $8.4bn more than Coalition

Labor has unveiled the final costings of its policies just two days out from the election, with a multi-billion dollar spending splurge.

Labor says they would inherit the trickiest economic conditions since the Second World War while justifying spending $8.4bn more than the Coalition over the next four years through its budget strategy.

Treasury spokesman Jim Chalmers and finance spokeswoman Katy Gallagher announced Labor’s policies would cost an extra $7.4bn over the forward estimates compared to the March budget in Canberra on Thursday.

The Coalition released its costings on Tuesday, showing an improvement to the bottom line of about $1bn.

That boils down to a difference of $8.4bn in spending between the two major parties.

Mr Chalmers said Labor’s plan was to grow the economy “the right way”.

He said the extra investments in childcare, training and education, along with cleaner energy, would get “the best bang for buck”.

“The modest $7.4bn difference between the two budgets is made up of (those) key investments,” he said.

“Every dollar of difference between us and the government is carefully calibrated to deliver a bigger economic return to deal with these challenges that we would inherit.

“These would be the trickiest economic conditions inherited by an incoming government since the Second World War.”

Mr Chalmers said they were releasing $11.5bn in budget improvements, including 13 savings measures.

Shadow Treasurer Jim Chalmers and Shadow Finance Minister Katy Gallagher announced the final costings in Canberra. Picture: NCA NewsWire/Martin Ollman

Speaking on Sky News from Brisbane after the release, Labor leader Anthony Albanese was pressed on how spending $8.4bn more than the Coalition reflected responsible economic management as the nation approaches $1 trillion in debt.

“What we will do is get rid of the waste and the rorts from the budget,” he said.

Mr Chalmers was asked whether he really believed “a couple of billion dollars” over the forward estimates wasn’t a big deal – in reference to a comment he made in previous days.

“I believe it is absolutely crucial to growing the economy the right way,” he said.

“We don’t take these decisions lightly.”

But Prime Minister Scott Morrison disagreed.

“I think Australians think $7.4bn is a lot of money, I really do,” he told reporters.

“What does all that do? Labor borrowing more, spending more, it puts pressure on interest rates, it puts pressure on inflation, it drives up the cost of living.”

Senator Gallagher said she expected the Liberal Party to run a scare campaign.

“We expect a last-minute scare campaign from the Liberal camp, it is all they have left,” she said.

“Our plan has deficits declining in both dollar terms and as a percentage of the economy each and every year. Spending as a per cent of GDP declines in each and every year.”

Jim Chalmers said he believed the extra spending was crucial to growing the economy the right way. Picture: NCA NewsWire/Martin Ollman

Treasurer Josh Frydenberg labelled Labor’s policy costings a “farce” because there was no independent verification.

Finance Minister Simon Birmingham said that Labor’s costings document was “flimsy” and “riddled with holes”.

“This last-minute document released with just one day until polling day by the Labor Party shows that they’re admitting higher deficits in each and every year,” he said.

Mr Birmingham took issue with the fact that Labor had promised $200m for a disaster ready fund, but the document only accounted for $29.4m.

He pointed to how Labor had also promised a $200m urban rivers fund and program, but the document had only accounted for $40m.

“They promised there’d be an Australian Centre for Disease Control,” he said.

“This document has a footnote saying we’ll talk to the states about how much it will cost.

“That’s no way to account for your budget.

“There are many other examples in this document that show that Anthony Albanese’s promises made through this election campaign aren’t properly accounted for in Labor’s costings.

“And so the $7.4bn they’re admitting of high debt deficits is just the beginning.”